"Today, our town government is leaner and more efficient than ever," Mahan said. "Although we've been experiencing the worst economic times since the Great Depression, we have managed to reduce the deficit while keeping taxes low."

Mahan said she has cut expenses by $2 million over two years. The town has 37 fewer workers this year and reduced its debt service by almost $500,000 by getting Moody's Investors Service to remove the "negative outlook" from its bond rating.

At the same time, she said, the town is facing economic challenges that kept it from reducing the deficit as much as she had hoped. Sales and mortgage tax income has plummeted, and the town faces an increase in retirement costs that could be as high as 39 percent.

The deficit she inherited was $20.9 million, she said, and she has managed to cut it by $5.5 million. Most of a one-time tax the town imposed to reduce the deficit, however, was swallowed up by increased costs and reduced revenue.

Mahan also hailed the fact that, for the first time, all town employees now contribute 10 percent to their health-insurance costs. "This is a huge step forward, one my administration has been working toward since 2008," she said.

Mahan also said she has worked to make the town more business friendly.

She cited the location of the Fresh Market in Latham as a success that is leading to other new businesses within the same plaza. A vacant manufacturing property is now headquarters for Precision Valve Automation, a 115,000-square-foot facility at One Mustang Drive she predicted would soon expand.

Along Central Avenue, she noted, the new Central Square Plaza has been developed, Green's Appliances put on a major addition and Paesan's Pizza next door knocked down four abandoned buildings.

"This entire block has been greatly improved, and we appreciate the efforts of these businesses working with us to help reduce the number of abandoned properties in town," she said.

During a question period afterward, one guest asked Mahan if the town was looking to convert employee pension plans from one where benefits are defined to one where the town contribution is defined but the benefit can vary.

"We haven't had any discussions in town regarding defined contributions," she said. "We really need more direction from the governor. I don't know any municipality that off the bat can handle a 39 percent increase. There are going to be challenges ahead with the pension systems."